Property tax subsidy cuts to affect levies on ballot

The state budget, which was signed into law last month, eliminated tax rollbacks for property owners. For local governments with new property tax levies on the ballot in November, the cut means voters will see a higher price tag attached to the proposed hike than was originally anticipated. And some townships are now trying to think up other ways to find funding.

Fairless Local Schools had a levy on the ballot in May that would have cost the owner of a $100,000 home about $273 a year.

The levy is going before voters again in November. But this time — because the state is no longer subsidizing a portion of property tax levies — it would cost the same home owner about $40 more annually.

“That does ... pose a new challenge for the fact that we will have to thoroughly explain to our constituents why that number is different,” Superintendent Brock Bidlack said.

The state budget, which was signed into law last month, eliminated tax rollbacks for property owners. For local governments with new property tax levies on the ballot in November, the cut means voters will see a higher price tag attached to the proposed hike than was originally anticipated.

In Fairless, Bidlack said a $40 difference could be a deal breaker for some families when they consider whether to vote for the levy.

“Is that an additional burden? Absolutely,” he said.

HOUSE BILL 59

Ohio legislators instituted a property tax rollback in the 1970s.

The state subsidized 10 percent of the tax for non-business properties, plus another 2.5 percent for owner-occupied homes, using funds from the income tax.

Under the new budget, House Bill 59, property owners will pay the full cost of their property taxes but will see income taxes reduced by a collective $2.7 billion during the next three years, according to the state.

Rob Nichols, press secretary for Gov. John Kasich, called the budget a “truth in taxes measure” and said high income taxes are the biggest barrier to job creation.

The change affects new and replacement property tax levies, not renewals.

The budget also alters who is eligible for the Homestead Exemption — a property tax break for seniors and the permanently disabled. New applicants will have to show they bring in less than $30,000 a year. Before, there was no income limit.

ON THE BALLOT

Fairless Local Schools is asking voters to pass an 8.9-mill, eight-year emergency school levy expected to generate about $1.5 million. The sole reason for the levy is to recoup funds lost from the federal and state governments and tangible personal property tax, which amounts to more than $1.2 million, Bidlack said.

Lexington Township has a 0.5-mill, five-year replacement policy levy on the ballot to maintain around-the clock police surveillance. The levy, if passed, is expected to generate $42,382 annually and cost the owner of a $100,000 home about $17 a year, Trustee Jim Mathews said. He called it “regrettable” that the state did away with the rollback but said, for this levy, residents wouldn’t notice a major difference. He acknowledged other townships are going to be hit harder by the cut.

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Canton Local Schools has an 8-mill, 30-year bond issue on the ballot in hopes of raising $36.6 million to build a new high school. Because of the rollback cut, the price for the owner of a home valued at $100,000 has jumped $35, to $280 a year.

Treasurer Jason Schatzel said any increase means asking voters to give up more money in economically challenging times. And, in general, the elimination of the rollback is going to make it tougher for school districts to pass levies, he said.

“I think the state’s not done the public education system any favors,” he said.

Also for November, Osnaburg Local Schools has a 5.9-mill continuing school levy on the ballot, and the city of Canton has a 4-mill, three-year parks and recreational levy on the ballot.

‘THAT SAME WELL’

Nichols said the elimination of the rollback should have “no direct impact” on local governments — unless they choose to pass new levies.

Matt DeTemple, executive director of the Ohio Township Association, said property taxes are a township’s primary funding source. When the idea to cut the property tax rollback surfaced in the legislature, his association submitted testimony in opposition.

“Local government just has a certain cost, and right now I think the state component of that is below the cost level, so we’re not funding local government adequately,” he said.

Randy Gonzalez, fiscal officer for Jackson Township, said the recent cuts echo a trend of pushing funding from the state to the local level — which forces governments to raise property taxes.

“Everybody’s dipping out oaf that same well,” he said.

He cited the eradication of the inheritance tax, which, for the township, means a loss of about $1.2 million or $1.3 million a year.

Consequently, Jackson Township officials are trying create joint economic development districts, which enable the township to partner with a city to lure business to the area and then split the income tax the city collects from the industry. Townships can’t collect income tax. Otherwise, Gonzalez said, there aren’t a lot of funding alternatives.

Plain Township doesn’t have a levy on the ballot this fall and has been relying on surpluses from previous years to operate, said Luther Russert, deputy fiscal officer.

But those funds are dwindling, and the township is debating how it’s going to pay for developing parks that aren’t generating user fees yet. It’s up to the trustees, he said, to figure out how to move forward without raising taxes.

“If the state keeps cutting back funding, I don’t see how they can really avoid it in future,” he said.